The State Of Our Schools: The Effect Of The "bare-bones" Budget On New York School Districts

The State of Our Schools: The Effect of the "Bare-Bones" Budget on New York School Districts

Prepared by the Public Policy and Education Fund

January 7, 2002

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The State of Our Schools is the first of a series of reports in 2002 analyzing school districts across the State of New York. This report will look at the effects of last session’s State budget on the budgets of school districts statewide.

This report was prepared by the Public Policy and Education Fund All of the data in this report relating to the impact the State’s budget on school districts was provided by Frank Mauro and Trudi Renwick of Fiscal Policy Institute, Inc.

To order more copies of this report or for more information, please contact AQE or PPEF as follows:

Alliance for Quality Education 23 Elk Street Albany, NY 12207 (518) 432-5315 (518) 432-9498 (fax) [email protected] www.allianceforqualityeducation.org Public Policy and Education Fund 94 Central Avenue Albany, NY 12206 (518) 465-4600 (ext. 104) (518) 465-2890 (fax) www.ppefny.org A copy of this report also appears on the Alliance for Quality Education and Public Policy and Education Fund web pages.

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INTRODUCTION

In two days, the Governor will deliver his "State-of-the-State" address to a joint session of the State Legislature and to the people of the State. The main purpose of the address is to provide an overview of the Governor's policy proposals to the State Legislature. Particularly important to the address is the Governor's fiscal plan: how he plans to spend state funds and to raise revenue. The specific blueprint for the Governor's fiscal proposals is set forth in the Executive Budget, which will be submitted to the Legislature for consideration later this month.

The Public Policy and Education Fund (PPEF) is a member of the Alliance for Quality Education ("AQE"), a one-year old coalition of over 170 hundred organizations dedicated to a quality education for all public school children, that collectively have hundreds of thousands of members throughout the State. AQE seeks to ensure that all students, pre-kindergarten through grade 12, receive a quality education. Based on recent public statements by the Governor and his representatives, PPEF and AQE have reason to fear that the Governor will propose cuts in state aid to education this year, in response to the fiscal crisis precipitated by the tragic events of September 11th.

The current crisis in New York State’s schools is not the result of September 11th, or of the slowing state economy. It is the result of a long process that has for years treated education as a political football in which the needs of our children took a back seat to political trade-offs. And while it is true that prior to this fiscal year, state funding for education had risen approximately 5.4% for the last 10 years,1 this has not made up for the years of neglect which have crippled schools from New York City to Buffalo to the Adirondacks. In fact, just one year ago in the landmark Campaign for Fiscal Equity (CFE) decision, a State Supreme Court judge found education underfunding to be so egregious so as to constitute a violation of the state constitution.2 1

Fiscal Policy Institute calculation from New York State Division of the Budget Education Unit "Summary of Aids Financed Through General Support for Public Schools.” 2 On January 10, 2001, Judge Leland DeGrasse shook up the education world in New York State by ruling that the state's system of financing education was illegal. Judge DeGrasse ordered the State Legislature to

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The central point of this report is that the statements by some commentators, including the Governor, that school aid increased in the 2001 legislative session through the enactment of the "bare-bones" budget are completely misleading. This report analyzes the effect of the “bare-bones" budget” adopted in 2001 by the Governor and the Legislature by comparing the State aid levels of the current fiscal year (2001-02) with the previous fiscal year (2000-01). This report finds that the 2001-02 enacted state budget, when adjusted for inflation, resulted in a decrease in per-pupil aid for 427 or 63% of the 678 state school districts surveyed. 2.3 million students, representing roughly 4 out of every 5 students in the state (81%), attend districts that receive less aid per-pupil than in the previous academic year.

The cuts made by the Governor and the Legislature to education are particularly disturbing, given the upcoming full implementation of the new Regents learning standards and the recent enactment of new initiatives such as the state class size reduction program that are designed to assist kids to meet these standards. These new mandates are of course commendable. However, they obviously impose new costs upon school districts that require year-to-year increases in school expenditures over and above inflation. In light of the increased need, the central finding of this report – that most school districts representing most kids actually received cuts when adjusted for inflation – should be disturbing to every friend of children in the state.

The impact of the cuts is already beginning to be felt throughout the state: layoffs in Buffalo and Rochester, cuts in extracurricular activities and teacher professional development in New York City, a freeze on equipment purchases in Binghamton, delays

restructure the state education financing system by September 15th by, among other things, providing additional funding to needy school districts. The Judge based his ruling on the "Education Article" of the New York State Constitution, which requires the state to provide all children with a "sound basic education," as well as federal regulations prohibiting racial discrimination in programs funded by the federal government, including schools. Both the decision in Campaign for Fiscal Equity v. State of New York and a summary of the decision may be obtained by visiting the Campaign for Fiscal Equity's website at the following address: www.cfequity.org. The ruling in the CFE case has been stayed as the Governor has appealed the decision.

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in new text book purchases in Syracuse, and cuts in academic intervention services in the Finger Lakes region. Perhaps most disturbing, among the first programs that were negatively affected by school district budget shortfalls were programs especially designed to help low performing students meet the new Regents standards. The resources needed to provide students with extra learning time before and after school, have been drastically cut or eliminated in many of the neediest school districts across the State.

PPEF and it supporters throughout the State are greatly concerned that the funding decreases that occurred with the enactment of the “bare-bones" budget” in August of 2001, just before the start of the school year, may portend a new and alarming trend of reducing the State’s commitment to its schools. This cannot be allowed to happen, justified either by September 11th, or due to the slowing of the state economy. We submit that an educated work force is critical to the recovery of the state's economy, and to the continued vitality of the State. We therefore urge the Governor and Legislature to accord priority funding to education during the 2002 legislative session.

METHODOLOGY AND FINDINGS

The report compares the amount of formula-based or computerized aid plus growth aid3 for school districts in the current school year (2001-02) to the prior year (2000-01) for 678 school districts4, using data from the State Education Department's "school aid runs" released in November 2001. The school aid amounts for school year 2000-01 are expressed in constant dollars, adjusted for inflation using the 3.4% change in the Consumer Price Index calculated as specified under state law for the school districts' 3

Formula-based or computerized aids in 2000-01 included the following specific aid programs: operating aid, tax effort aid, tax equalization aid, transition adjustment aid, gifted and talented aid, minor maintenance aid, public excess cost aid, private excess cost aid, educationally related supportive services apportionment (ERSSA) aid, extraordinary needs aid, operating standards aid, limited English proficiency AID, transportation aid, BOCES aid, special services aid, computer hardware aid, textbook aid, computer software aid, library materials aid, full-day kindergarten aid, pre-kindergarten aid, class size reduction aid, summer school aid, tax limitation aid, reorganization incentive operating aid, shared services for BIG 5 aid. These specific aid programs were replaced with a single grant for "computerized aids" in the 2001-02 school year. Growth aid, while not considered a "computerized aid" is provided to districts with enrollment growth in excess of .4% and is essentially a supplement to the district's operating aid. 4 This analysis considers all school districts included in the SED school aid runs except two districts,

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2001-02 School Property Tax Report Cards. Transportation and building aid are not included in the analysis for either school year. Our analysis found that: •

81% of students (or 4 of 5 students) attend school in districts that received a reduction in per-pupil aid between the two years. (See Chart Entitled: "County-byCounty Summary")

•

In addition, between 2000-01 and 2000-02: •

427 of the 678 districts, or 63% received a reduction in per-pupil aid. (See Chart Entitled: "County-by-County Summary")

•

On average, school districts statewide received a $76 reduction in per-pupil aid. (See Chart Entitled: "County-by-County Summary")

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39 of the 50 largest school districts, or 78% received a reduction in state aid. Major cities that received cuts included New York City ($85.1 million), Buffalo ($4.1 million), and Utica ($215,000). (Yonkers received a minimal increase of $72,455, but a 1.2% reduction in state aid per-pupil.) (See Charts Entitled: "Fifty Largest School Districts" and "Fifty Districts with Largest Declines in Total Aid.")

•

35 of 58 counties in the state received a reduction in the average aid per-pupil countywide. (See Chart Entitled: "County-by-County" Summary). 5 6

CONCLUSION

This short analysis indicates that, contrary to the claims of some, 2001 was a year of cuts in the State's commitment to education. This is particularly disheartening, given that the year began with a powerful judicial declaration that the state was mandated to increase education funding. Further, the school aid cuts this year affected most schoolchildren and most school districts around the state: 4 of 5 children attended school in districts receiving a reduction in per-pupil aid, and over 3 of 5 districts received a Monroe Woodbury and Dansville, for which enrollment data for 2001-02 was not available 5 For the purposes of this statistic, New York City was treated as one county. 6 Breakdowns of the change in per-pupil formula aid plus growth aid from FY 2000-01 to 2001-02 as well as the change in formula plus growth aid for this period for every one of the 678 districts covered in this survey is available by visiting: www.alliance forqualityeducation.org. On our website, the districts are listed in county by county charts.

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reduction in per-pupil aid. Moreover, the school aid "losers" were distributed throughout the state. (See Chart Entitled: "Fifty Districts with Largest Declines in Total Aid.") As the New York State School Board Association survey discussed in the appendix to this report highlights, our children will pay the price for the State's shortsightedness: most school districts have indicated they are making program cuts to reduce their budget gaps arising from the bare-bones budget. Pupil performance will suffer in the long-term if the State continues to shortchange its public school children.

Further, as the Appendix to this report indicates, the problem of underfunding of schoolchildren was enormously exacerbated last legislative session by the months of stalemate over the state budget, almost entirely due to a failure to agree on school aid levels. Districts were unable to effectively plan their budgets and therefore their educational programs, because they did not know how much state aid they would ultimately receive once a budget agreement was reached. School districts like the City of Buffalo that were particularly state aid dependant, as well as districts that were not extremely conservative in "guesstimating" how much state aid they would receive (and some that were in fact quite conservative in their estimates), are now faced with making mid-year cuts or revisions of their education programs, to the detriment of district children.

The Public Policy and Education Fund believes that the state must change its course in the upcoming legislative session if New York is going to continue to make progress towards meeting two critical educational mandates: ensuring that all children in the State receive a "sound basic education" in accordance with the state constitution, and closing the "achievement gap."

We therefore call upon the Governor and the Legislature to commit themselves to significantly increase school aid this legislative session, and to reform the inequitable school aid formula. The current economic difficulties of the State may require the Governor and the Legislature to phase-in increases in school aid over a period of years.

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However, given the unconscionable cuts schoolchildren were subject to last year, there must be a significant down payment made on our obligations to our children this year.

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APPENDIX

"BUDGETING IN THE DARK" IN 2001: IS THIS ANY WAY TO RUN OUR SCHOOLS?

Exacerbating the problem of underfunding described in the main text of this report has been the 200l budgetary mess, in which school districts still did not know as of the beginning of the 2001-02 school year how much aid they would ultimately receive. The chaotic budget "process" of the 2001 legislative session easily was the most dysfunctional state budget fight in decades, if not ever, to the detriment of every recipient of state aid, particularly school children.

The formal budget process begins when the Governor releases his proposed budget in mid-January. Then the Legislature negotiates with the Governor and a final budget is adopted. By law, the Governor and the Legislature are supposed to complete the negotiation process and adopt a budget by March 31st, the end of the State’s fiscal year. In reality, this process is almost never completed in a timely fashion. In fact, for each of the last eighteen years, the budget has been late.

Last session, the “bare-bones" budget was adopted in August – over 4 months late. The supplemental budget, which was intended to fill some of the holes from the bare-bones budget, and to correct its technical flaws, was not adopted until October 25, 2001. As of that time, there was only five months left in the fiscal year. As of today, with approximately 13 weeks left in the fiscal year, some of the allocations the from the supplemental budget have still not been publicly released. Otherwise put, some school districts still do not have the final numbers as to what school aid they will eventually receive.

Virtually all school districts in the state are required to prepare their budgets in early spring. Districts where the citizens vote on the school budget (all districts except the “Big Five”) are mandated to publicly release their proposed budget before May 15th,

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the date school budgets are voted on across the state. Districts must tell voters the amount the district intends to spend, the programs the district will run and the level at which the school tax rate will be set to support the budget. This year, given that the state budget was not decided as of May 15th, school districts had to "guesstimate" as to the amount of State aid that would be received. Further, as these districts must send tax bills to property owners sometime between August 15 and mid-September (depending on the local law) to meet this requirement, districts had to once again "guesstimate" the amount of state aid they would ultimately receive.

A similar chaotic process happened in the "Big 5" school districts (Buffalo, Rochester, Syracuse, Yonkers, and New York City), which set their school budgets in conjunction with their City’s budget. The Big 5 school district budgets generally become final with the beginning of each city’s fiscal year on July 1st; they too, had to "budget in the dark" since state aid levels were not determined by that date.7

How did school districts deal with the need to "budget in the dark" in the 2001 legislative session? By looking at the Governor and Legislature's past practice. Historically, the numbers in the Governor’s Executive Budget have been much lower than the final adopted budget. The State Assembly has generally made the highest initial proposal for school aid, and the State Senate has proposed a number between the other two parties. The final state budget ultimately adopted has typically been between the Governor's and the Assembly's numbers. Nevertheless, most districts played the game of guesstimation quite conservatively in 2001. According to a September survey by the New York State School Board Association, 61% of school districts relied on the Governor's Executive Budget proposal in projecting their tax rates in May, 19% relied most on the average district aid increase for recent years, and 5% relied on the Senate proposal.8

7

The Big 5 are also known as "fiscally-dependent" school districts because they have no authority to set school taxes, but must instead rely on funding from their city and the State for their schools. 8 See New York State School Boards Associations. Districts Tax, Beg, Borrow to Cover Budget Gap (9/10/01). Available by visiting: www.nyssba.org.

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As suggested above, some school districts functioned in 2001 as they had become accustomed to in this bizarre process, by assuming that they would receive somewhere between the Governor's and the Assembly's number, perhaps somewhat closer to the Senate’s number. This was a reasonable assumption, given past history. Further, in 2001, there were good reasons for school districts to assume they would get considerably more than the Governor's proposed school aid increase (a $382 million increase statewide, less than the rate of inflation), since the state coffers were full, and the Campaign for Fiscal Equity decision raised hopes of significant school aid increases. However, in 2001, the usual bets were off, because the Governor and the Legislature ultimately adopted the "bare-bones" budget, which essentially enacted the school aid numbers in the Governor's Executive Budget.

Many districts that made the assumption that they would get more than the Governor's figures are now being forced to make program cuts or take other emergency measures to make up their budget shortfalls as a result. However, given the finding of this report the most districts ultimately received less school aid when inflation is taken into account, we must assume that even districts that budgeted conservatively (i.e., by assuming they would receive only the Governor's figures) may also have to make some cuts. In fact, a recent survey indicated that more than 9 of 10 school districts in the state stated that they would be forced to raise taxes, abolish programs, or take other forms of emergency action as a result of the "bare-bones" budget.9 This is no way to run our schools.

9

Id. 57% of the districts surveyed are making program cuts.

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The State of Our Schools (Part II): The Combined Effect of the 2001-02 "Bare Bones" Budget and the Proposed 2002-03 State Aid "Freeze"

Public Policy and Education Fund

April 17, 2002

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The State of Our Schools (Part II): The Combined Effect of the 2001-02 "Bare Bones" Budget and the Proposed 2002-03 State Aid "Freeze" is the second in a series of reports analyzing the impact of state policy decisions on school districts and school children across the State of New York. This report analyzes the combined effect of last year's "bare bones" budget and this year's Executive Budget on the budgets of school districts statewide.

This report represents a revised and updated version of the report, The State of Our Schools: The Effect of the "Bare Bones" Budget on New York School Districts, that the Public Policy and Education Fund issued in January 2002. That earlier report was prepared by the Public Policy and Education Fund based on a series of data analyses and tables prepared by Trudi Renwick of Fiscal Policy Institute. The updated tables and analyses presented in this report were also prepared by Dr. Renwick.

The Public Policy and Education Fund (PPEF) is a member of the Alliance for Quality Education ("AQE"), a two-year old coalition of over 200 hundred organizations dedicated to a quality education for all public school children, that collectively have hundreds of thousands of members throughout the State. AQE seeks to ensure that all students, pre-kindergarten through grade 12, receive a quality education. To order more copies of this report or for more information, please contact AQE or PPEF as follows:

Alliance for Quality Education 23 Elk Street Albany, NY 12207 (518) 432-5315 (518) 432-9498 (fax) [email protected] www.allianceforqualityeducation.org Public Policy and Education Fund 94 Central Avenue Albany, NY 12206 (518) 465-4600 (ext. 104) (518) 465-2890 (fax) www.ppefny.org A copy of this report also appears on the Alliance for Quality Education and PPEF web pages.

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INTRODUCTION

Governor Pataki's January 2002 Executive Budget proposed a virtual freeze in state aid to education. If the Governor's budget were adopted as proposed, school aid for the 2002-03 school year would be $14,192 million - - up only $6 million, or four one-hundredths of one percent, over the 200102 "bare bones" budget level. And, as the business-supported Citizens Budget Commission has pointed out, when one adjusts for inflation, the Governor is actually proposing a $284 million reduction in state aid to education1.

As State Legislators complete their work on the 2002-03 state budget, they have the opportunity to provide essential increases to the budget for school aid. Without such increases, school districts will face the second straight year of funding deficiencies. The ability of public schools to provide a sound basic education to our young people will be further jeopardized. Even Governor Pataki has recently acknowledged that New York schools need an aid increase. Despite the school aid "freeze" that he proposed in January, the Associated Press reported that on Wednesday, April 10, the Governor said that state aid to education should be increased beyond the amount proposed in his Executive Budget.

The crisis facing New York State’s schools is not merely the result of September 11th or of the slowing state economy. Rather, it is the result of a process that for years treated education as a political football in which the needs of our children took a back seat to political trade-offs. While it is true that prior to last year's "bare bones" budget, state aid to education, adjusted for inflation, rose at an annual rate of approximately 2.6% for the last 9 years,2 this has not made up for the years of neglect which crippled schools from New York City to Buffalo to the North Country and this in no way justifies this year's proposed "freeze" in state aid to education. In fact, eight months before the adoption of the "bare bones" budget, in the landmark Campaign for Fiscal Equity (CFE) decision, State Supreme Court Justice Leland DeGrasse found education underfunding to be so egregious as to constitute a violation of the state constitution.3 1

The Citizens Budget Commission publication: Achieving A Better Balance: Recommendations for the New York State Budget for Fiscal Year 2003 No Significant Improvement In Flawed School Aid. 2 Fiscal Policy Institute calculation from New York State Division of the Budget Education Unit "Summary of Aids Financed Through General Support for Public Schools 3 On January 10, 2001, Judge Leland DeGrasse shook up the education world in New York State by ruling that the state's system of financing education was illegal. Judge DeGrasse ordered the State Legislature to restructure the state education financing system by September 15th by, among other things, providing additional funding to needy school districts. The

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METHODOLOGY AND FINDINGS

The report compares the amount of formula-based or computerized aid plus growth aid4 for school districts proposed for the school year 2002-03 to the 2000-01 for 678 school districts5, using data from the State Education Department's "school aid runs" released in March 2002. The school aid amounts for school year 2000-01 are expressed in constant dollars, adjusted for inflation using the 3.4% and 2.8% changes in the Consumer Price Index calculated as specified under state law for the school districts' 2001-02 and 2002-03 School Property Tax Report Cards. Building aid is not included in the analysis for either school year. Our analysis found that: •

86% of students (or 6 of 7 students) attend school in districts that received a reduction in perpupil aid. (See Summary Table I)

•

In addition, between 2000-01 and 2002-03: •

478 of the 678 districts, or 71% received a reduction in per-pupil aid. (See Summary Table I")

•

On average, school districts statewide received a $171 reduction in per-pupil aid. (See Summary Table II)

•

46 of the 50 largest school districts, or 92% received a reduction in state aid. Major cities that received cuts included New York City ($179.6 million), Buffalo ($12.6 million), Yonkers ($5.2 million) and Utica ($1.3 million). (See Table Entitled: "Fifty Largest School Districts.")

Judge based his ruling on the "Education Article" of the New York State Constitution, which requires the state to provide all children with the opportunity for a "sound basic education," as well as federal regulations prohibiting racial discrimination in programs funded by the federal government, including schools. Both the decision in Campaign for Fiscal Equity v. State of New York and a summary of the decision may be obtained by visiting the Campaign for Fiscal Equity's website at the following address: www.cfequity.org. The ruling in the CFE case has been stayed as the Governor has appealed the decision. 4

Formula-based or computerized aids in 2000-01 included the following specific aid programs: operating aid, tax effort aid, tax equalization aid, transition adjustment aid, gifted and talented aid, minor maintenance aid, public excess cost aid, private excess cost aid, educationally related supportive services apportionment (ERSSA) aid, extraordinary needs aid, operating standards aid, limited English proficiency AID, transportation aid, BOCES aid, special services aid, computer hardware aid, textbook aid, computer software aid, library materials aid, full-day kindergarten aid, prekindergarten aid, class size reduction aid, summer school aid, tax limitation aid, reorganization incentive operating aid, shared services for BIG 5 aid. These specific aid programs were replaced with a single grant for "computerized aids" in the 2001-02 school year. Growth aid, while not considered a "computerized aid" is provided to districts with enrollment growth in excess of .4% and is essentially a supplement to the district's operating aid. 5 This analysis considers all school districts included in the SED school aid runs except two districts, Monroe Woodbury and Dansville, for which enrollment data was not available

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•

45 of 58 counties in the state received a reduction in the average aid per-pupil countywide. (See Summary Table II). 6 7

•

High needs districts would not be spared from the proposed school aid cuts. 30 of the 50 school districts with the highest percentage of students scoring at level 1 or 2 of the 4th Grade and 8th Grade Math and English Language exams would suffer cuts in per pupil school aid. (See Table Entitled: "Fifty Districts with Highest Percent of Students at Levels 1 & 2.") IMPLICATIONS FOR OUR SCHOOLS

The central point of this report is that adoption of the Governor's proposed school aid "freeze" would result in most school districts in the state facing significant school aid cuts for the second year in a row. This report analyzes the cumulative effect of last year's “bare bones" budget and this year's proposed "freeze" in school aid by comparing the proposed state aid levels for the 200203 school year with the state aid levels for the 2000-01 school year. This report finds that the school aid levels proposed in the 2002-03 Executive Budget, when adjusted for inflation8, would result in a decrease in state aid to education of $475 million when compared to 2000-01. Furthermore, per-pupil aid would be reduced for 478 or 71% of the 678 state school districts analyzed.9 Therefore, 2.4 million students, representing roughly 6 out of every 7 students in the state (86%), attend districts that would receive less aid per-pupil than they did two years ago.

The cuts to education made by the Governor and the Legislature last year and the state aid "freeze" proposed by the Governor this year are particularly disturbing, given the upcoming full implementation of the new Regents learning standards and the recent enactment of new initiatives such as the state class size reduction program that are designed to assist kids to meet these standards. These new mandates are of course commendable. However, they obviously impose new costs upon school districts that require year-to-year increases in school expenditures over and above inflation. In light of the increased need, the central finding of this report – that most school districts actually received cuts when adjusted for inflation – should be disturbing to every friend of children in the state. 6

For the purposes of this statistic, New York City was treated as one county. Breakdowns of the change in per-pupil formula aid plus growth aid from FY 2000-01 to 2002-03 as well as the change in formula plus growth aid for this period for every one of the 678 districts covered in this survey are available by visiting: www.allianceforqualityeducation.org. On our website, the districts are listed in county by county charts. 8 The amounts are adjusted by change in Consumer Price Index as set by state law for districts’ in their 2001-02& 2002-03 School Property Tax report Cards. 9 The 678 school districts analyzed include all school districts in the state except two districts for which enrollment data was not submitted and the seven districts with less than eight teachers. 7

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The impact of the cuts resulting from last year's "bare bones" budget were felt throughout the state: layoffs in Buffalo and Rochester, cuts in extracurricular activities and teacher professional development in New York City, a freeze on equipment purchases in Binghamton, delays in new text book purchases in Syracuse, and cuts in academic intervention services in the Finger Lakes region. Perhaps most disturbing, among the first programs that were negatively affected by school district budget shortfalls were programs especially designed to help low performing students meet the new Regents standards. The resources needed to provide students with extra learning time before and after school, have been drastically cut or eliminated in many of the neediest school districts.

As school districts across the state propose budgets for the next year, even more drastic measures are being considered to address the second straight year of state school aid reductions. Some school districts are addressing the cuts in state aid by increasing local property taxes. Other districts are cutting essential programs and services to students to accommodate the revenue losses. Most districts are struggling to find a combination of program cuts and tax increases.

A survey conducted by the New York State School Board Association shows that adoption of the flat state education budget proposed by Gov. George E. Pataki would severely diminish the quality of school programs and impose substantial new burdens on local taxpayers. Almost all of the districts that responded to the survey indicated that they would curtail programs if the governor's proposed budget were enacted as the 2002-03 state budget.

Among the most disturbing findings of the survey were the districts’ plans for teacher and support staff layoffs: 70 percent would eliminate instructional positions and 68 percent would eliminate non instructional positions. In addition, districts expect to make the following cuts: professional development (79 percent of districts), enrichment programs (76 percent), services for students at risk of not meeting the higher academic standards (58 percent), extracurricular activities (54 percent), sports (47 percent) and early childhood programs (42 percent).

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In addition, 72 percent of school districts said they would delay purchases, Other likely impacts would be larger classes (68 percent) and delayed capital projects (37 percent). Despite these cutbacks, 95 percent of responding districts said they would still have to increase their tax levy, by an average of 12.8 percent. Thirty-nine districts are projecting increases in excess of 20 percent, and one district projects a 56 percent increase in the levy. •

New York City Schools Chancellor Harold O. Levy told the City Council's Education Committee that the board's budget deficit would "affect every level of the school system more profoundly than any round of budget cuts in recent memory." According to the Chancellor, except for summer school for the neediest students, everything is on the chopping block.. Schools will have to make do with broken desks and fewer guidance counselors and truant officers. Art, sports and afterschool programs will be scaled back or slashed, along with training for uncertified teachers.

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The school district covering Washington Heights, facing an $8.4 million cut, may have to drastically scale back remedial programs for newly arrived immigrant children and their parents and a Saturday program for students who want to earn high school credit.

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In Queens, advanced placement courses are on the chopping block as high schools prepare for a $21 million cut. The schools may also lose guidance counselors, teacher trainers and attendance teachers, who round up truants. New furniture for the borough's badly overcrowded high school classrooms is out of the question, and most of the after-school classes that survived last fall's budget cuts will now be decimated.

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In Albany, the city school district's proposed 2002-03 budget calls for a nearly 10 percent tax increase, elimination of 19 teaching positions, increases in class sizes and reduction of the district’s reserve fund.

•

On April 10th, the Buffalo School Board approved a budget request that would raise class sizes, reduce extra help for struggling students and gut plans to improve the system's traditionally weak efforts to recruit and retain teachers. The plan also would reduce maintenance at the city's aging school buildings, eliminate late buses after extracurricular activities, hamper efforts to upgrade the system's troubled computer system, cut teacher training and prevent schools from replacing damaged textbooks or buying updated materials. Average class sizes would increase to 27 from 24 in elementary grades, to 27 from 25 in academic high schools, and to 27 from 20 in vocational high schools Even so, the budget request hinges on $20 million from the state and $2 million from the city that has not been committed and is far from certain. If that money is not forthcoming, city schools will consider additional cuts in non-mandated programs such as kindergarten, sports, instrumental music, school security, elementary school guidance counselors, librarians and attendance teachers. This austerity plan comes on the heels of last year's 318 layoffs, including 212 teachers and 60 teachers' aids.

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In Rochester City School District officials have begun to scour the budget for places to cut. Among the items that could end up on the chopping block are leases, programs and jobs. Meanwhile, acting Chief Financial Officer Henry Marini has asked all department heads and principals to lower their budgets by 25 percent. 6

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•

In Troy, faced with an $11 million deficit, the Board of Education voted to lay off 87 employees -including 32 teachers -- effective June 30. Even with those cuts, district officials say they will need further cuts and a 35 percent tax increase to balance the budget..

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In Brockport, officials are hoping to avoid teacher lay-offs. They plan to close their budget gap through attrition. This year the district expects 30 or more teachers to retire and less than a third of these slots will filled.

•

In Ballston Spa, the district's proposed reductions would come mostly in instructional staffing, totaling approximately $500,000 in savings to keep the tax rate increase proposal under 6 percent. The proposed reductions include a clerical position, a transportation office position, a hall monitor, a special education position, a librarian and half of a social worker position, among others. The School Superintendent blamed the proposed rate hike and staffing cuts on a decrease of $456,326 in state aid due to the state's "bare bones" budget and financial implications of Sept. 11.

•

In Greenville, a rural district in Greene County, a 15 percent tax increase is being proposed, even after cutting teaching positions, support staff and vocational education. The neighboring Coxsackie-Athens district is also anticipating a double-digit property tax increase after making cuts.

•

The Mechanicville School District in Saratoga County is anticipating a property tax increase of 17 percent, and staffing cuts. PPEF and it allies throughout the State are greatly concerned that the funding decreases that

occurred with the enactment of the “bare-bones" budget in August of 2001, just before the start of the school year, may portend a new and alarming trend of reducing the State’s commitment to its schools. This cannot be allowed to happen, because an educated work force is critical to the recovery of the state's economy, and to the continued vitality of the State, as well as to our children’s future. We therefore urge the Governor and Legislature to accord priority funding to education during the 2002 legislative session.

CONCLUSION

This short analysis indicates that, contrary to the claims of some, 2001 was a year of cuts in the State's commitment to education and the Governor's proposed "freeze" on aid in this year's budget will exacerbate the fiscal crisis facing the state's school districts. This is particularly disheartening, given that 2001 began with a powerful judicial declaration that the state was mandated to remedy an inadequate education funding system. Further, the school aid cuts over these two years would affect most schoolchildren and most school districts around the state: 6 of 7 children attend school in districts 7 Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

which would receive a reduction in per-pupil aid, and almost 3 out of 4 districts would received a reduction in per-pupil aid. Moreover, the school aid "losers" were distributed throughout the state. (See Chart Entitled: "Fifty Districts with Largest Declines in Total Aid.") Our children will pay the price for the State's shortsightedness: most school districts have already made program cuts to reduce their budget gaps arising from the "bare-bones" budget. The Governor's proposed "freeze" on school aid for 2002-03 will force districts to further cut districts. Pupil performance will suffer in the longterm if the State continues to shortchange its public school children.

The Public Policy and Education Fund believes that the state must change its course immediately if New York is going to continue to make progress towards meeting two critical educational mandates: ensuring that all children in the State receive a "sound basic education" in accordance with the state constitution, and closing the "achievement gap."

We therefore call upon the Legislature and the Governor to commit themselves to significantly increase school aid this legislative session, and to reform the inequitable school aid formula. The current economic difficulties of the State may require the Legislature to phase-in increases in school aid over a period of years. However, given the unconscionable cuts schoolchildren were subject to last year, there must be a significant down payment made on our obligations to our children this year.

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No Funding, No Fairness: The State of Our Schools in 2004

A Report By the Public Policy and Education Fund, Inc. October 4, 2004

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This report is the third in a series of reports that analyze the impact of state policy decisions on school districts and school children across the State of New York.

This report was written by Bob Cohen of the Public Policy and Education Fund, Inc. (PPEF) based on data, tables, and charts provided by Frank Mauro, the Executive Director of the Fiscal Policy Institute (FPI). PPEF supports community organizing, research, and public education on issues of concern to low and moderate income New Yorkers. FPI is a nonpartisan research and education organization that focuses on a broad range of tax, budget, economic and related public policy issues that affect the quality of life and economic well-being of New York State residents. Both PPEF and FPI are members of the Alliance for Quality Education.

The Alliance for Quality Education (AQE), formed in 2000, is a coalition of over 230 organizations statewide dedicated to ensuring that the constitutional right to a quality education becomes a reality. Local AQE affiliates presently exist in Western New York, the Finger Lakes, the Southern Tier, Central New York, Westchester, New York City, and Long Island.

To order more copies of this report or for more information, please contact AQE or PPEF as follows:

Alliance for Quality Education 23 Elk Street Albany, NY 12207 (518) 432-5315 (518) 432-9498 (fax) [email protected] www.allianceforqualityeducation.org Public Policy and Education Fund 94 Central Avenue Albany, NY 12206 (518) 465-4600 (ext. 104) (518) 465-2890 (fax) www.ppefny.org A copy of this report also appears on the Alliance for Quality Education and Public Policy and Education Fund web pages.

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SUMMARY OF MAJOR FINDINGS The Legislature passed a 2004-05 budget that not only failed to implement the court order in the Campaign for Fiscal Equity case, but actually moved school aid backward. 1. School districts statewide received $1.7 billion (78%) less of an Operating Aid increase than they would have received had the first year of the CFE "Adequate Foundation for All Plan" ("CFE Proposal" or "CFE Plan") been implemented. New York’s local school districts received an Operating Aid1 increase of $475.4 million, or 4.3% in the 2004-05 school year. Under the CFE Plan, they would have received a $2.1 billion increase in 2004-05, as first step in a four-year plan. This amounts to a "constitutional funding gap" of 78%.2 A constitutional funding gap is the percentage difference between what a school district should have received in the 2004-05 school year under the CFE Proposal and what it actually received in the enacted budget. New York City and 55 of the other 57 counties in the state all had constitutional funding gaps. The only exceptions were Hamilton County with 549 students and Putnam County with 17,103 students. Each of the state's five biggest cities had constitutional funding gaps. New York City had a funding gap of 76.9%, Buffalo, 75.0%, Rochester, 71.0%, Syracuse, 69.0%, and Yonkers, 68.3%

2. Despite the CFE court order mandating that a greater share of state school aid dollars be distributed to needy school districts, the additional aid in the enacted budget was not distributed to school districts based on the relative student needs of each district. Nor was this additional aid distributed on the basis of the relative ability of the various districts’ taxpayers to pay for education. o Free and Reduced Price Lunch Measure (Poverty): The wealthiest 20% of school districts (Poverty Deciles 9 & 10, encompassing the 136 school districts in the state with the lowest percentages of poor children) received Operating Aid increases of 3.7% and 3.2%, a larger increase than the school districts in Poverty Deciles 2 through 8 (whose increases ranged from 1.8% to 1

This study uses the terms "State Aid for Basic Educational Operations" and "Operating Aid" interchangeably. As explained in the full report, since” Total State Aid" contains additional items such as building aid that do not reflect the funds available for school districts for basic school operations, we consider the Operating Aid measure the more appropriate one for the purpose of comparisons. The Total School Aid Increase for 2004-05 was $740.5 million, or 5.3%.

2

CFE only proposed to give school districts in 2004-05 roughly 25% of the incremental increases they would have needed in 2004-05 to meet the requirements of the state constitution.

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3.1%). (Poverty Decile 1, which includes New York City, received a 5.7% increase.) o SED "Need/Resource Category" Measure (SED Classification Based on School District Taxpayers' Ability to Pay for Education Relative to the Needs of the Children in Their District’s Schools): The five biggest cities in the state, all "high-need" districts, individually and collectively received higher funding increases than the state average of 4.3%. New York City (its own need/resource category) received an increase of 5.8%, and the "Big Four" Cities (Buffalo, Rochester, Syracuse and Yonkers), received an average increase of 6.6%. However, the "high-need" districts in the state other than the "Big 5" collectively did worse than the state average. The 43 high-need urban and suburban districts other than the Big 5 received a 3.6% increase, and the 159 high-need rural districts received a 3.2% increase – both less than the state average of 4.3%. The 135 districts with the most wealth relative to their student need (i.e., the SED "Low-Need/Resource Category") collectively received a 3.5% increase -- similar to what the poor urban and suburban districts received (3.6%). Average-need districts did the worst with a 2.3% increase. o SED "Combined Wealth Ratio" Measure (Combination of Income and Property Wealth in the School District): The third, fourth and fifth poorest 10% of districts in the state by ability to pay for their children's education (CWR Deciles 3-5) received smaller average school aid increases (ranging from 1.6% to 2.3%) than the wealthiest 50% of the districts in the state (CWR Deciles 6-10; ranging from 2.6% to 5.3%).

3. Under the CFE Plan, the distribution of aid would have been radically different, and the overwhelming majority of districts would have received greater funding than in the enacted budget. A comparison between the 2004-05 enacted budget and the first year of CFE Proposal -- a plan that rationally directs state funding based on student needs and district capacity -- reveals that the enacted budget did not direct the additional funding based on relative student needs in each district and the relative ability of district taxpayers to pay for education. High-need and average-need districts suffered from a "constitutional funding gap." However, wealthy districts generally fared better off under the enacted budget than they would have fared had the CFE Plan been enacted: a "negative" constitutional funding gap.

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o Free and Reduced Price Lunch Measure (Poverty): Each of the 8 deciles with the most needy children had a large "constitutional funding gap." The gap ranged from 68% (Poverty Decile 8) to 88% (Poverty Deciles 3, 4, 5, 6). The wealthiest 10% of school districts received 10% more on average in the 2004-05 budget than they would have received under the CFE Proposal, and the second wealthiest 10% received 65% more. o SED "Need/Resource Category" Measure (SED Classification Based on School District Taxpayers' Ability to Pay for Education Relative to the Needs of the Children in Their District’s Schools): Only the 135 "low-need" districts fared better under the enacted budget than they would have under the CFE Plan, collectively receiving 6.9 times the increase ($23.0 million versus $2.9 million, or 688.2%) than they would have received under CFE. The high-need districts as a whole had a constitutional funding gap of 77.9%, slightly higher than the state average. Average-need districts had a gap of 82.4%. o SED "Combined Wealth Ratio" Measure (Combination of District Income and Wealth): The 7 deciles representing the 70% of school districts with the lowest combination of income and property wealth all had large "constitutional funding gaps," ranging from 66.4% (CWR Decile 7) to 90.6% (CWR Decile 5). Only the wealthiest 30% of districts fared better under the current budget than they would have under the CFE Proposal.

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INTRODUCTION This report3 examines what really happened to state school aid in 2004-05, the school year that followed the state Court of Appeals' landmark June 2003 Campaign for Fiscal Equity (CFE) decision. We look at the funding in 2004-05 from two broad perspectives: the increases in state aid provided to school districts throughout the state, and the critical issue of adequate funding underlying CFE: the need to base state aid on the relative needs of children in school districts around the state, and on the relative revenue-raising capacity of local districts.4

In order to address the adequacy issue, we compared the increase in education aid actually provided by the Governor and the Legislature for the 2004-05 school year ($475 million) with the amount of increased state aid that would be necessary to provide children with their constitutional rights: the $2.1 billion recommended by the "Sound Basic Education Task Force" ("SBE Task Force") created by the Campaign for Fiscal Equity.5 The $2.1 billion figure is the best benchmark we have available of how a rational and fair state funding formula would allocate our state aid dollars, as the proposal resulting from the Task Force, the "Adequate Foundation for All Plan," was designed to fully comply with the requirements of the CFE decision. We call the percentage difference between what a school district would have received in the 2004-

3

This is the third of a series of reports analyzing the impact of state educational policy decisions on school districts and children throughout New York State. The first two are: "The State of Our Schools: The Effect of the 'Bare Bones' Budget on New York School Districts" (January 2002), and "The State of Our Schools (Part II): The Combined Effect of the 2001-02 'Bare Bones' Budget and the Proposed 200203 State Aid 'Freeze'" (April 17, 2002). Both reports are available at www.allianceforqualityeducation.org. 4

The CFE litigation prevailed on the issue of adequacy rather than equity, namely the claim that education for New York City schoolchildren fell below the minimum standards mandated by the state constitution. Nevertheless, the plaintiffs raised as a central concern that New York City was being underfunded in comparison to other districts in the state. 5

The Campaign for Fiscal Equity, Inc. is a non-profit organization of educational advocates that brought the landmark lawsuit of the same name.

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05 school year under the Task Force plan and what it actually received as the "constitutional funding gap."

In CFE v. State, New York State's highest court held that New York City schoolchildren had been denied a "sound, basic education" in violation of the Education Article of the state constitution.6 In a case brought by New York City parents in response to the historic underfunding of City schools, the Court agreed with the parents -- following a lengthy trial in the lower court -- that “tens of thousands of students … [had been] placed in overcrowded classrooms, taught by unqualified teachers, and provided with inadequate facilities and equipment." In response, the Court of Appeals ordered the Governor and the Legislature (effectively through legislation) by July 30, 2004 to: (i) determine the "actual cost" of providing a sound, basic education in New York City, (ii) ensure that every school has the resources necessary for providing the opportunity for a sound, basic education, and (iii) ensure a system of accountability to measure whether the reforms actually provide this opportunity.

The CFE lawsuit was in part a response to the overarching deficiencies in New York State's education finance system, sometimes known as the education funding "formula," which has been recognized by 30 years of state commissions, educational advocates, and now, the courts.7 Most significantly, the present system is extraordinarily "unfair to pupils and taxpayers in school districts with lower than average revenue-raising capability and/or higher than average needs… fails to provide adequate consideration to students with special needs; and does not recognize regional and/or 6

Campaign for Fiscal Equity v. State, 100 N.Y.2d 893 (2003). More specifically, the court held that the state constitution required that students from kindergarten through grade 12 receive a "meaningful high school education" that will provide them with the necessary skills to be capable citizens and obtain "competitive employment." The web page of the plaintiffs (www.cfequity.org) contains extensive materials on the background of the case, including the briefs and other submissions of the parties. CFE's web site, and AQE's (www.allianceforqualityeducation.org) both contain extensive information about the legislative struggle for a new school aid formula, including the major reform proposals of advocates and state leaders. 7

See Campaign for Fiscal Equity, Inc., "Sound Basic Education Task Force: Ensuring Educational Opportunity for All: Final Report," (May 2004), at 16-20 ("CFE Sound Basic Education Task Force Report," "CFE SBE Task Force Report" or "SBE Task Force Report.") The report is available at http://www.wfequity.org/SBETaskForceFinalReport.pdf.

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local cost differences."8 The politics of the Legislature and the Governor, including a desire to give certain "shares" to certain regions of the state, year-to-year fiscal problems, and the creation of "categorical" programs, all have contributed to an irrational and unfair school aid system in which student needs and school districts' ability to pay for education are not the primary determinants of how much a district receives from the state.9

The Public Policy and Education Fund (PPEF) is a member of the Alliance for Quality Education (AQE), a statewide coalition of over 230 organizations around the state that was established in part to coordinate the efforts of an increasing chorus of organizations and individuals concerned about the state's failure provide adequate funding to all of its schools, and poor urban, rural and suburban districts in particular. Past reports by AQE members have helped to document this failure, and the positive statewide impact of funding reform. A 2001 PPEF report found that enactment of a comprehensive educational funding reform plan with many of the central features of the CFE Plan would provide increased state aid to roughly 2 of 3 school districts in the state.10 Further, a March 2003 PPEF report determined that the 65 school districts in the state with at least one school listed as "in need of improvement" under the federal No Child Left Behind Act -- generally districts with larger than average numbers of poor children and those with greater educational needs -- were spending roughly $2000 or

8

CFE SBE Task Force Report, at 16-17.

9

As the trial court said in the CFE case: The evidence at trial demonstrated that the formulas do not operate neutrally to allocate school funds---at least with respect to annual increases in State aid. Rather the formulas are manipulated to conform to budget agreements reached by the Governor, the Speaker of the State Assembly, and the Senate Majority Leader." CFE v. State of New York, 187 Misc.2d 1, 93 (S.Ct, N.Y. Co, 2001) (emphasis added). See also, for example: State Comptroller. "A $3.4 Billion Opportunity Missed: Despite Four Years of Large Increases State School Aid Formulas Still Don't Provide Equitable, Predictable or Efficient Funding," November 2000. 10

"Upstate, Downstate: Schools Throughout New York Will Benefit From Funding Reform," Public Policy and Education Fund, March 12, 2001. The report found that the rest of the districts would not be cut, however, due to the "save harmless" feature of the plan prohibiting districts from receiving less than the amount received prior to the inception of the plan.

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18% less per-child than the other school districts in the state.11 This report documents that the state is continuing to shortchange its neediest children, and that a rational school aid system would economically benefit the overwhelming majority of schoolchildren in the state.

Due to the CFE decision, the annual fight over the 2004-05 state budget began with some hope of reforms to the system of unequal school funding in the state. However, the 2004 legislative session ended in monumental failure with a small increase in school aid and no fundamental reform of the state's irrational and unfair school aid formula.12

Early in the session, there appeared to be a consensus of our state leaders on the need for systemic statewide reform. While the remedies ordered in CFE only applied to New York City, where the case arose, the Governor, Assembly Speaker and the Senate Majority Leader all repeatedly called for statewide reforms after the decision. The Governor, who had fought the Campaign for Fiscal Equity's claims in court for years, changed his rhetoric after the Court of Appeals decision, declaring that the decision presented a "historic opportunity" for reform. He appointed a 20-member Commission on Education Reform, known as the "Zarb Commission," to address the decision and other related issues.13

However, the "historic opportunity" for reform was ultimately missed. The billions of additional dollars required to comply with the court decision did not materialize, because the Legislature and the Governor were unable to agree on reforms that complied with the decision by the July 30th court deadline. 11

"Separate and Unequal: Pataki's Budget Cuts Hit Struggling Schools the Hardest," Public Policy and Education Fund, March 19, 2003. 12

Although the state fiscal year begins each year on April 1st under the state constitution, in 2004, the state budget was passed in August. The primary reason for the delay was the failure of state leaders to agree on the school aid budget. 13

AQE's analysis of the reform proposals of each of the three state leaders, including the Governor's plan that was roughly based on the recommendations of the Zarb Commission, is available at www.allianceforqualityeducation.org.

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Instead of formula reform, Operating Aid for education statewide was increased by only $475 million over the previous year, or 4.3%.14 Although this increase was an improvement over the Governor's Executive Budget, which would have provided $101 million15 in increased Operating Aid aid, less than what was required to keep up with inflation, the final budget at best enabled many districts to maintain current programs, and some school districts have had to make program cuts this school year. The $475 million amount was provided despite the fact each of the studies done in anticipation of or in response to the decision found that billions of additional dollars had to be appropriated for school districts around the state to secure the constitutional rights of the schoolchildren of the state.

What this report found is extremely disturbing, but unfortunately not surprising: the state continues to shortchange its school districts, particularly its "high-need" districts. We found in this report that school districts statewide received $1.7 billion less in Operating Aid this year than they would have received under the CFE Proposal: a constitutional funding gap of 77.7% statewide.

Secondly, we document beyond any doubt that the state in 2004-05 utterly failed to address the mandate of the Court of Appeals. The additional aid provided to the Legislature in the enacted budget was not distributed to school districts based on the relative student needs of each district. Nor was this additional aid distributed on the basis of the relative ability of the various districts’ taxpayers to pay for education. Our analysis showed that the 207 "high-need" districts in the state -- districts with larger proportions of poor and other needy children -- had a "constitutional funding gap" of 77.9%, slightly higher than the state average. Funding for poorer districts shouldn't be

14

The $475 million figure excludes certain items such as building aid and BOCES aid to enable better comparisons between districts; it is the number used in the text of this report for the purposes of comparison with the CFE "Adequate Foundation for All" Plan. The "Total Aid" increase was $740.5 million. See the "Methodology and Findings" section of this report for a fuller explanation of the difference between the $475 million and $740 million figures. 15

The Governor's proposed increase in "Total Aid" was $147 million.

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keeping pace with the rest of the state. We should be closing the funding gap for these districts.

Further, we found that the 43 "high-need" urban districts in the state other than the "Big 5" (New York City, Rochester, Buffalo, Syracuse, and Yonkers) received only a 3.6% increase in Operating Aid, and the 159 high-need rural districts received a 3.2% increase, both less than the state average of 4.3%. The Big 5 received more of an increase than the state average this year, but these cities, with large numbers of needy children, still had "constitutional funding gaps" ranging from 69% to 77%. Only the 135 "low-need" districts in the state fared better under the enacted budget than under the CFE Plan.

The Governor has conceded in court that nothing was done to modify the existing school aid formula that was the basis of the CFE decision.16 The analysis in this report confirms this, and demonstrates that the 2004-05 budget if anything exacerbated the existing inequities.

The simple message of this report is that high-need districts, with large numbers of poor children, English Language Learners and disabled children, continued to be shortchanged by the state in 2004 -- despite a landmark court decision calling for a reversal of this trend. However, our study also shows that even "average-need" districts would significantly benefit from funding reform. These districts, roughly half the school districts in the state, suffer from a "constitutional funding gap" of 82.4% -- the highest gap of any of SED's six "need/resource categories" of districts. Given the shocking failure by our state leaders to comply with the state constitution, and to enact commonsense reforms that would benefit nearly every schoolchild in the state, the public must continue to speak out forcefully on behalf of public education.

16

See, Memorandum of Attorney General Eliot Spitzer on Behalf of State of New York, CFE v. State, Before the Panel of Special Masters, at 2. (September 1, 2004) This brief is available at http://www.cfequity.org/StateBrief.9.1.04.pdf).

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METHODOLOGY AND FINDINGS I.

Methodology: This study compares the amount of formula-based or

computerized aid in the enacted 2004-05 state budget to the CFE Adequate Foundation for All Plan for the 680 school districts in the state. For the enacted state budget, we use data from the State Education Department's "school aid runs." The "runs" use two measures: "Total School Aid," and a smaller number, that is used as the basis for this study: "State Aid for Basic Educational Operations," or simply "Operating Aid."17 The Operating Aid figure excludes from Total School Aid a number of items (building aid, BOCES, transportation, full day kindergarten, special services, reorganization incentive aid, and growth aid) which either fluctuate widely or are otherwise unrelated to the amount actually available for school operations so as to distort year-to-year comparisons, or comparisons between districts.18

The Operating Aid figure is also used in this study to compare school aid in enacted budgets with school aid figures proposed in the CFE Adequate Foundation for All Plan as a means of determining the extent that the state aid actually provided compares with a solid plan that addresses the requirements of the CFE decision and the state constitution (see Section II below for an explanation of this plan, and why we used it rather than other data sources).19

In order to determine the distribution of Operating Aid increases throughout the state for 2004-05, this study also aggregates the district-by-district data in regard to Operating Aid increases by decile (each decile has 10% of the total districts) based on 17

An example of a school aid run for one district (Albany City School District), with each of the aids listed, and the Total and Operating Aid figures provided for the district: is at: http://www.nysed.gov/stateaid/dist/legis04/cb/010100.HTML. 18

The use of the term "Operating Aid" in this report is more all-encompassing than the "Operating Aid" category in the present funding formula. 19

The two numbers are directly comparable because the CFE Proposal numbers also exclude virtually the same items: building aid, BOCES, transportation, and growth aid.

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three standard school district measures used by the State Education Department (SED): (i) "SED Need/Resource Categories;" (ii) numbers of students eligible for free and reduced price lunch (a measure of poverty); and (iii) the "combined wealth ratio (CWR).20

Each school district is placed in one of six SED "Need Resource" categories based on SED's "N/RC Index," a measure of a district's ability to meet the needs of its students with local resources. Specifically, school districts are classified based on school district taxpayers' ability to pay for education locally as compared to the needs of the children in their district's schools. The Need/Resource categories are: (1) New York City public schools; (2) "Large City" or "Big 4" Districts (all high-need: Buffalo, Rochester, Syracuse and Yonkers: the biggest 4 school districts in the state other than NYC); (3) High-Need Urban-Suburban Districts; (4) High-Need Rural Districts; (5) Average -Need Districts; and (6) Low-Need Districts. This study also sometimes combines the data for the four high-need categories to enable comparisons between high-, average-, and low-need districts (see, for example, Figure 7).

The free and reduced price lunch measure is determined by the number of students in kindergarten through grade 6 participating in the free-and-reduced-price lunch program divided by the enrollment in full-day kindergarten through 6, expressed as a percentage.

Finally, the CWR is a measure of a combination of the income and property wealth in any particular school district. Specifically, the CWR for any district is an average of two ratios: the ratio of the district's property wealth per pupil to the statewide average property wealth per pupil, and the ratio of the district's income per pupil to the statewide average income per pupil. This study also aggregates certain data by county.

20

For a more complete explanation of these three concepts, see the definitions of "Need/Resource Capacity (N/RC) Code," "Percent Free/Reduced Price Lunch," and "CWR" in the glossary contained in SED, "New York: The State of Learning: A Report to the Governor and the Legislature on the Educational Status of the State's Schools: Submitted July 2003" (available at www.nysed.org).

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We also compared the enacted school aid numbers for 2004-05 with the districtby-district increases in school aid for 2004-05 developed by the SBE Task Force in the CFE "Adequate Foundation for All Plan." The Plan was developed by the SBE Task Force, under the leadership of CFE, the New York State School Boards Association, and the Fiscal Policy Institute; the Task Force's membership included representatives of over 20 education organizations and governmental entities.21 The Plan utilizes a "foundation formula" that determines how much each school district in the state would receive based on a statewide "Sound, Basic Education Foundation Amount" that includes virtually all school district educational expenses, and then adjusts this figure for any district – and the resulting breakdown between the local and state share of aid – based on a number of factors relating to the relative needs of children in the school district and property taxpayers' ability to pay for education locally. The Plan, in summary: •

begins the calculation of each school district's allocation of state aid by determining a "Sound Basic Education foundation amount" statewide consisting of virtually all school district education expenses except for transportation, facility construction costs, debt service, and high cost public and private special education placements;

•

determines each district's SBE foundation based on a statewide average foundation amount per pupil by adjusted by a) "needs index" reflecting poverty, disability levels, numbers of English language learners and a small school size factor; and b) a geographic cost of education index;

•

determines the responsibility for financing each district's SBE foundation amount between the local district and the state government on the basis of the district's relative "ability to pay" as measured by poverty-weighted property and income wealth ratios; and

•

phases in the Plan over a four-year period, appropriating roughly 25% of the new allocation for each of the next four years to reach the full amount.22

21

CFE SBE Task Force Report, at 21. The list of the organizations and governmental entities appears at Appendix A of the Task Force Report. Membership on the Task Force does not imply endorsement of the proposal by the organization that any task force member represents. 22

CFE SBE Task Force Report at 21-23. The formula used to calculate any district's state funded Operating Aid is summarized by the SBE Task Force as follows: (a) The State Per Pupil SBE Foundation Amount TIMES (b) The District's Enrollment TIMES

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The Plan (and specifically, the SBE foundation amount, the needs index, and the geographic cost of education index in the Plan) are derived from the New York Adequacy Study. This independent study was undertaken to comply with the mandates of the trial court and the Court of Appeals in CFE that the state determine the "actual cost" of providing the opportunity for a sound, basic education. Performed by two highly experienced firms, the New York Adequacy Study is the most comprehensive costingout study ever performed in the United States. Therefore, the "district-by-district" numbers used in the Plan are based on the "actual cost" of providing a "sound, basic education," one of the main requirements of CFE.

Under the CFE Plan, the full amount each school district is required to ultimately receive to meet the constitutional standard would be phased-in in a four-year period, with each district receiving roughly 25% of the full amount in 2004-05, the Plan's first year.23 The CFE Proposal, based on the findings of the New York Adequacy Study, estimated that school districts statewide would need $8.5 billion more in Operating Aid if fully implemented in the 2004-05 year. However, due to the four-year phase-in feature of the plan, CFE only proposed a $2.1 billion increase for 2004-05.24 Therefore, our assignment of a "constitutional funding gap" for any district (or category of districts) in this study involves comparing current funding levels to a plan which itself does not purport to give school districts the spending levels they are constitutionally entitled to in the first year. Simply put, it is arguable that the "constitutional funding gap" numbers should be significantly higher than in this study. (c) The District's Educational Needs Factor TIMES (d) The District's Geographic Cost Index Factor LESS (e) The District's Local Operating Aid Contribution (Based on the District's Relative Poverty-Adjusted Property Wealth and Income Wealth Per Pupil). Id., at 15. 23

The intent of the CFE SBE Task Force in making this proposal was to "fairly balance[] the urgent need to ensure all children their constitutional right for a sound basic education with the practical need for time for planning and implementation to ensure that the additional funds are spent efficiently and effectively." CFE SBE Task Force Report, at 37. 24

Id., at 36.

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To calculate the "constitutional funding gap" for any school district, we divided the increase received by the district by the increase the district would have received for Operating Aid in 2004-05, and expressed it as a percentage. The result was subtracted from 100%, so a minus number means that a district has a "constitutional funding gap."25 A positive number (for example, the 688% figure for the low-need resource category districts in Figure 2) means that the category of districts would do better under the current enacted budget than under the CFE Plan.

II.

Why the Adequate Foundation for All Plan Was Used in this Study: The

reason PPEF used the district-by-district recommendations from the "Adequate Foundation for All Plan" is that it is the only reliable measure available of how much each school district in the state should have received in the 2004-05 school year.

As

already stated, this independent study, the most comprehensive costing-out study ever performed in the United States, was undertaken to comply with the mandate of the CFE courts that the state determine the "actual cost" of providing the opportunity for a sound, basic education. The educational model used in the Adequacy Study "is the first in New York State to directly confront the critical issue of the precise level of resources needed to provide all students in the state the opportunity to meet the Regents Learning Standards…".26

In this report, we rejected using the two additional "studies" that have been purportedly undertaken to measure the cost of providing a "sound, basic education" for each school district in the state. The first was performed by the New York State Regents as part of their 2004-05 Proposal on State Aid to School Districts. The Regents' study was not used for this report because it was an:

25

For example, a figure of –70.0% in the charts, which we refer to in the text as a "constitutional funding gap of 70%", means that the category of districts received 70% less of an increase under the 2004-05 enacted budget than it would have received had the CFE Plan been in effect in 2004-05. 26

CFE SBE Task Force Report, at 7.

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in-house analysis, based on available data, that was undertaken on an expedited basis … to provide an analytical basis for the Regents' annual state aid proposal. The published description of its methodology and findings is brief and offers only partial data and limited analyses that, on its face, does not purport to be a full-scale study.27

The second was performed by Standard and Poor's for the Zarb Commission to assist it with developing its school aid proposals to resolve CFE v. State, but is not a true costing-out study: According to the S&P researchers, their mission was to provide a range of data, based on a variety of assumptions and estimates, "to inform the Commission's deliberative process, not to determine its outcome." In other words, the S&P researchers did not purport to be conducting a comprehensive costing out study that would determine the actual cost of providing a sound basic education.28

III.

Findings: The major findings of our analysis are as follows.

1. School Aid Increases, School-Year 2004-05: The 680 school districts in the state received an Operating Aid increase of only $475.4 million, or 4.3% in 2004-05 (Figures 1, 2). This is compared to a Total State Aid increase of $740.5 million, or 5.3%.29

2. Distribution of School Aid Increases, School Year 2004-05: In a year following a court decision mandating that a greater share of state school aid dollars be provided for "high-need" districts, the additional aid was not distributed according to districts with the greatest needs, measured by the percentage of pupils in the district eligible for free or reduced price lunch. While the 68 districts in the poorest poverty decile (Poverty 27

Memorandum of the Campaign for Fiscal Equity, Inc., CFE v. State, Before the Panel of Special Masters (September 1, 2004), Appendix, at 10 ("Appendix to CFE Memo Before Special Masters"). 28

Appendix to CFE Memo Before Special Masters, at 5-6.

29

School Aid Runs, Adopted Budget, available at http://www.assembly.state.ny.us/comm/WAM/20040809/.

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Decile 1) did receive the highest percentage increase of any decile (5.7%), this is heavily influenced by the fact that New York City, which received a total increase of 5.8%, is included in this decile. There is little or no correlation between the numbers of students eligible for free and reduced price lunch and the percentage increase the district received. For example, the wealthiest two deciles (Poverty Deciles 9 and 10) received Operating Aid increases of 3.7% and 3.2% respectively, while deciles 2 through 8 had increases ranging from 1.8% to 3.1% -- less than that the amount received by the 20% of school districts with the lowest concentrations of poor students (Figures 2-4).

Nor was the additional aid distributed to school districts on the basis of the relative ability of taxpayers of school districts to pay for education locally. This can be shown by examining the distribution of the operating aid received by SED need/resource categories -- a SED classification of districts based on local taxpayers' ability to pay for their children's education. New York City (its own SED need/resource category) received an Operating Aid increase of 5.8%, and the "Big Four" Cities (Buffalo, Rochester, Syracuse and Yonkers), received an increase of 6.6%, both more than the 4.3% increase for the state as a whole. (The individual increases for the "Big 4" are as follows: Buffalo, 5.0%; Rochester, 8.3%; Syracuse, 6.9%; Yonkers, 6.9%.) However, the 43 districts in the "Other Urban and Suburban High Need/Resource Category" received a 3.6% increase, and the 159 high-need rural districts received a 3.2% increase -- both less than the state average of 4.3%. The 135 districts with the most wealth compared to their district needs (the "Low Need/Resource Category) received a 3.5% increase -- similar to what the poor urban and suburban districts received (3.6%). Average-need districts did the worst, at 2.3% (Figures 5-7).

The "combined wealth ratio" measure -- a combination of wealth and income -shows no little or no correlation between these factors and the school aid distribution in the 2004-05 enacted budget. For example, school districts in CWR Decile 3 (the third poorest 10% of districts) received a 2.3% increase, districts in CWR Decile 4 received a 1.9% increase, and districts in CWR Decile 5 received a 1.6% increase. However,

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CWR Deciles 6-10 -- representing the wealthiest 50% of the districts in the state, all had higher Operating Aid increases (respectively, 5.3%, 3.6%, 3.0%, 3.3%, and 2.6%) than Deciles 3-5 (Figures 8, 9).

3. The "Constitutional Funding Gap" Statewide: The $475.4 million Operating Aid increase (4.3%) in the enacted budget for school districts statewide is $1.7 billion or 78% less of an increase than they would have received had the first year of the CFE Proposal been implemented. (The CFE Proposal recommended a $2.1 billion increase.) This amounts to a "constitutional funding gap" of 77.7% (Figures 1, 2).30

4. Distribution of the Constitutional Funding Gap: A comparison between the 2004-05 enacted budget and the first year of CFE Proposal reveals that the enacted budget did not direct the additional funding based on relative student needs in each district and the relative ability of district taxpayers to pay for education. High-need and average-need districts suffered from a "constitutional funding gap." However, wealthy districts generally fared better off under the enacted budget.

This pattern is shown by an examination of SED's free and reduced price lunch measure, the main measure used to gauge poverty levels of students. Each of the 8 deciles with the most needy children had a large "constitutional funding gap." The gap ranged from 88% (Poverty Deciles 3, 4, 5, 6) to 68% (Poverty Decile 8). The remaining 20% -- the wealthiest 1/5th of districts (Poverty Deciles 9 and 10) -- fared better under the current budget than they would have under the CFE Proposal -- a "negative" constitutional funding gap. The wealthiest 10% of school districts (Poverty Decile 10) – with 0% to 3.3% of their students eligible for free or reduced price lunch -- received 9.5% more on average in the 2004-05 budget than they would have received under the CFE Proposal. The second wealthiest 10% (Poverty Decile 9), with 3.3% to 8.9% of their students eligible for free and reduced price lunch, received 64.8% more. By way of comparison, districts in Poverty Decile 3 (39.3% to 45.6% eligible for free and reduced

30

As already stated, even the CFE $2.1 billion figure provides school districts in 2004-05 with roughly 25% of the incremental increases they would have needed that year to meet the requirements of the state constitution.

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price lunch) received an average increase of 2.2%, and districts in Poverty Decile 4 (34.4% to 39.3% free and reduced price lunch eligible), received an average increase of 2.0% (Figures 3, 4).

Of the six SED need/resource categories, a SED classification based on school district taxpayers' ability to pay for their children's education, only the 135 "low-need" districts fared better under the enacted budget than they would have under the CFE Plan. These districts collectively received 6.9 times the increase ($23.0 million versus $2.9 million, or 688.2%) than they would have received under the CFE Plan. By contrast, New York City had a "constitutional funding gap" of 76.9% ($1.1 billion aid increase proposed by CFE versus $259.4 million increase received in 2004-05, a difference of $864.0 million), the Big 4 Cities had a gap of 71.7% (a difference of $130.3 million between CFE and the enacted budget), the 43 other high-need urban and suburban districts had a gap of 83.9%, the 159 high-need rural districts had gap of 82.1%, and the 338 average-need districts had a gap of 82.4% (Figures 5-7).

The 207 high-need districts as a whole (combining these four SED need/resources categories: New York City, "Big-4" Cities, high-need urban and suburban, high-need rural) had a constitutional funding gap of 77.9%, slightly higher than the state average (Figure 7).

The 7 deciles that represent the 70% of school districts with the lowest combination of income and property wealth -- using the SED's "combined wealth ratio" measure -- all had large "constitutional funding gaps," ranging from 66.4% (CWR Decile 7) to 90.6% (CWR Decile 5). For example, CWR Decile 1, containing the poorest 10% of districts, received $251.6 million less than CFE proposed -- a constitutional funding gap of 76.8% (Figures 8, 9).

Only the wealthiest 30% of districts fared better under the current budget than they would have under the CFE Proposal, using the CWR measure. Specifically, the wealthiest 10% (CWR Decile 10) received 7 times as great an increase under the

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enacted budget (702.3%; $3.3 million versus $412 thousand), the second wealthiest 10% (CWR Decile 9) received 73 times as great an increase under the enacted budget (7250%; $11.0 million vs. $149 thousand), and the third wealthiest 10% (CWR Decile 8) received 89% more ($18.3 million vs. $9.7% million) (Figures 8, 9).

5. The Constitutional Funding Gap on a Regional Basis. The "constitutional funding gap" is widely distributed throughout the state. Students in virtually every county in the state were economically hurt by the Governor's and the Legislature's failure to enact comprehensive school aid reform. New York City and 55 of the other 57 counties in the state all had constitutional funding gaps. The only exceptions are Hamilton County in the Adirondacks, with only 549 students, and Putnam County with 17,103 students (Figures 10, II).

Even the wealthier downstate suburban counties would benefit financially under the CFE Proposal. Nassau County had a "constitutional funding gap" of 40.0%, Westchester, 52.3%, Suffolk, 53.7%, and Rockland had a funding gap of 59.3%. Nassau County schools received $13.9 million less in 2004-05 than they would have received under the CFE Plan, Westchester schools received $15.1 million less, Suffolk schools received $43.1 million less, and Rockland schools were shortchanged by $3.8 million (Figures 10, II).

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CONCLUSION This study demonstrates that the Legislature and the Governor did nothing in 2004-05 to address one of the most critical issues facing our educational system: the failure to adequately tie state school aid funding levels to student needs and district funding capacity. Eleven years after the plaintiffs in Campaign for Fiscal Equity brought a lawsuit over the inadequate funding of New York City schools, and two months after the expiration of a deadline set by the state's highest court for the deficiencies identified in the decision to be corrected, the promise of quality education for all of the state's children, particularly its poor children, remains unfulfilled.

This report debunks several of the myths surrounding the educational funding reform movement. Perhaps most prominent is the myth that only a small number of districts, or limited regions of the state, would benefit from funding reform. Our analysis demonstrates that 55 of the 57 counties in the state in addition to New York City would have received more state education funding if the CFE Plan had been enacted than they actually received in 2004-05. Even the limited number of districts that would not receive higher funding under the CFE Plan would not be cut, due to the "save harmless" feature in the Plan providing that no district would receive funding than the year before the Plan was enacted.31

And despite the efforts by some to portray the funding battle as a clash of cities versus suburbs and rural areas, our study found that high-need rural districts had the second highest constitutional funding gap of any of the six categories of school districts established by SED (average-need districts had a gap of 82.4%, versus 82.1% for highneed rural districts). Our analysis found that even wealthier suburban downstate counties have significant constitutional funding gaps, although not as great as most upstate counties. Average-need districts, as we've just seen, would also benefit from funding reform in the form of significantly increased state aid. Although the CFE lawsuit 31

CFE SBE Task Force Report, at 14.

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was undoubtedly heavily driven at its inception by the shortchanging of "high-need" districts, this report demonstrates that a rational legislative resolution of the case would financially assist the overwhelming majority of schoolchildren in the state.32

The ultimate real life consequences of the failure of our state leaders to agree to an adequate school aid plan are clear. The schoolchildren of the state will continue for the foreseeable future to suffer from constitutionally inadequate schools -- including crumbling buildings, out-of-date textbooks, computers and other educational resources, and unqualified teachers -- and the real life consequences: high drop-out rates, low rates of college attendance, and inadequate preparation for skilled employment and meaningful participation in civic life.

32

Even wealthier districts subject to "save harmless" under the CFE Plan would benefit from the predictability of a foundation formula. CFE SBE Task Force Report, at 16, 24.

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Figure 1

Statewide Constitutional Funding Gap in Dollars 2,500,000,000

$1.66 Billion

$2.1 Billion 2,000,000,000

1,500,000,000

1,000,000,000

$475 Million 500,000,000

0

2004-05 Adopted Budget - CFE - Proposed Year 1 (2004-05) Increase in State Aid for Basic Increase in State Aid for Basic Educational Operations Educational Operations

Constitutional Funding Gap

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19

Figure 2

2004-2005 Enacted Budget: Increases in State Aid for Basic Educational Operations, by State Education Department's Need/Resource Categories

State Education Department's Need Resource Categories (NRC)

New York State - Total

Number of Districts

Number of Pupils

2004-2005 Enacted Budget: Increase from Prior Year in State Aid for Basic Educational Operations*

$ increase

% Increase

CFE Proposed 2004-2005 Increase in State Aid for Basic Educational Operations**

Difference Between Enacted Budget and CFE Proposal

$ Difference .

% Difference

680

2,864,439

475,440,857

4.3%

2,131,776,093

-1,656,335,236

-77.7%

New York City

1

1,039,124

259,395,944

5.8%

1,123,378,393

-863,982,449

-76.9%

Big Four Cities (Buffalo, Rochester, Syracuse and Yonkers)

4

131,235

51,480,406

6.6%

181,774,043

-130,293,637

-71.7%

Other Urban and Suburban High NRC Districts

43

223,916

41,217,228

3.6%

255,675,638

-214,458,410

-83.9%

High NRC Rural Districts

159

177,534

31,879,832

3.2%

178,502,994

-146,623,162

-82.1%

Average NRC Districts

338

884,326

68,596,873

2.3%

389,543,476

-320,946,603

-82.4%

Low NRC Districts

135

408,304

22,870,574

3.5%

2,901,549

19,969,025

688.2%

Notes: *From data on "increase over base without selected aid catecories" from Adopted Budget school aid runs available at http://www.assembly.state.ny.us/comm/WAM/20040809/

** From CFE Operating Aid Proposal available at http://www.cfequity.org/SBETaskForceFinalReport.pdf

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Figure 3

Constitutional Funding Gaps (in % Terms) by Poverty Deciles of School Districts 100%

75%

50%

25% Poverty Decile 9

Poverty Decile 10

0%

-25%

54.3% to 94.8% Poverty Decile 1

45.6% to 54.3% Poverty Decile 2

39.3% to 45.6% Poverty Decile 3

34.4% to 39.3% Poverty Decile 4

29.0% to 34.4% Poverty Decile 5

23.6% to 29.0% Poverty Decile 6

16.0% to 23.6% Poverty Decile 7

8.9% to 16.0% Poverty Decile 8

-50%

3.3% to 8.9% 0.0% to 3.3% The 2 deciles of school districts with the least needy children had negative funding gaps, meaning that they received greater increases in state aid under the adopted budget than they would have received under Year 1 of the CFE proposal (2004-05).

-75%

Percent of Children Eligible for Free or Reduced Price Lunch by Deciles of School Districts (from Districts with the Highest Concentrations of Needy Children to the Districts with the Least Needy Children) Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

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Figure 4

2004-2005 Enacted Budget: Increases in State Aid for Basic Educational Operations, by Poverty Deciles Poverty Decile (from the decile with the most needy children, #1, to the decile with the least needy children, #10)

Percentage of Pupils Eligible for Free or Reduced Price Lunch

Number of Districts

Number of Pupils

2004-2005 Enacted Budget: Increase from Prior Year in State Aid for Basic Educational Operations*

$ increase.

% Increase

2,864,439

475,440,857

4.3%

68

1,365,729

358,258,087

54.3%

68

117,998

39.3%

45.6%

68

Poverty Decile 4

34.4%

39.3%

Poverty Decile 5

29.0%

Poverty Decile 6

CFE Proposed 2004-2005 Increase in State Aid for Basic Educational Operations**

Difference Between Enacted Budget and CFE Proposal

$ Difference.

% Difference

2,131,776,093

-1,656,335,236

-77.7%

5.7%

1,542,737,961

-1,184,479,874

-76.8%

17,583,792

3.1%

101,122,862

-83,539,070

-82.6%

108,098

11,030,791

2.2%

90,958,347

-79,927,556

-87.9%

68

116,834

9,533,610

2.0%

76,137,052

-66,603,442

-87.5%

34.4%

68

118,828

9,417,262

1.9%

77,307,152

-67,889,890

-87.8%

23.6%

29.0%

69

171,254

11,452,240

1.8%

92,235,983

-80,783,743

-87.6%

Poverty Decile 7

16.0%

23.6%

67

163,208

11,658,798

2.1%

79,190,944

-67,532,146

-85.3%

Poverty Decile 8

8.9%

16.0%

68

250,550

16,159,892

2.2%

50,506,105

-34,346,213

-68.0%

Poverty Decile 9

3.3%

8.9%

68

266,767

20,014,677

3.7%

12,147,764

7,866,913

64.8%

Poverty Decile 10

0.0%

3.3%

68

185,173

10,331,708

3.2%

9,431,922

899,786

9.5%

From

To

New York State - Total

0.0%

94.8%

680

Poverty Decile 1

54.3%

94.8%

Poverty Decile 2

45.6%

Poverty Decile 3

Notes:

*From data on "increase over base without selected aid catecories" from Adopted Budget school aid runs available at http://www.assembly.state.ny.us/comm/WAM/20040809/ ** From CFE Operating Aid Proposal available at http://www.cfequity.org/SBETaskForceFinalReport.pdf

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Figure 5

Constitutional Funding Gaps (in % Terms) for the Big 5 School Districts and for the State's Other Districts by the State Education Department's Need/Resource Categories 100.0%

80.0%

60.0%

40.0%

20.0%

0.0% New York City -20.0%

Buffalo

Rochester

Syracuse

Yonkers

Other High High NRC Average NRC Low NRC NRC Urban Rural Districts Districts Districts and Suburban Districts The Low NRC districts,

-40.0%

on average, had a negative funding gap of 688% which is actually off this chart.

-60.0%

-80.0%

-100.0% Note: Under the State Education Department's Needs/Resource Classification System, New York City is it's own category while Buffalo, Rochester, Syracuse and Yonkers are combined into a "Big 4 Cities" Category Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

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Figure 6

2004-2005 Enacted Budget: Increases in State Aid for Basic Educational Operations, by State Education Department's Need/Resource Categories, with Big 4 Cities Shown Seperately

State Education Department's Need Resource Categories (NRC)

New York State - Total

Number of Districts

Number of Pupils

2004-2005 Enacted Budget: Increase from Prior Year in State Aid for Basic Educational Operations*

$ increase

% Increase

CFE Proposed 2004-2005 Increase in State Aid for Basic Educational Operations**

Difference Between Enacted Budget and CFE Proposal

$ Difference .

% Difference

680

2,864,439

475,440,857

4.3%

2,131,776,093

-1,656,335,236

-77.7%

New York City

1

1,039,124

259,395,944

5.8%

1,123,378,393

-863,982,449

-76.9%

Buffalo

1

44,028

15,240,147

5.0%

60,879,345

-45,639,198

-75.0%

Rochester

1

40,247

20,601,978

8.3%

70,935,459

-50,333,481

-71.0%

Syracuse

1

21,918

9,713,932

6.9%

31,287,043

-21,573,111

-69.0%

Yonkers

1

25,042

5,924,349

6.9%

18,672,196

-12,747,847

-68.3%

Big Four Cities (Buffalo, Rochester, Syracuse and Yonkers)

4

131,235

51,480,406

6.6%

181,774,043

-130,293,637

-71.7%

Other High NRC Urban and Suburban Districts

43

223,916

41,217,228

3.6%

255,675,638

-214,458,410

-83.9%

High NRC Rural Districts

159

177,534

31,879,832

3.2%

178,502,994

-146,623,162

-82.1%

Average NRC Districts

338

884,326

68,596,873

2.3%

389,543,476

-320,946,603

-82.4%

Low NRC Districts

135

408,304

22,870,574

3.5%

2,901,549

19,969,025

688.2%

Notes:

*From data on "increase over base without selected aid catecories" from Adopted Budget school aid runs available at http://www.assembly.state.ny.us/comm/WAM/20040809/

** From CFE Operating Aid Proposal available at http://www.cfequity.org/SBETaskForceFinalReport.pdf

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Figure 7

2004-2005 Enacted Budget: Increases in State Aid for Basic Educational Operations, by State Education Department's Need Resource Categories, with the Four High-Need Categories* Combined

State Education Department's Need Resource Categories (NRC)

Number of Districts

Number of Pupils

2004-2005 Enacted Budget: Increase from Prior Year in State Aid for Basic Educational Operations**

$ increase

% Increase

CFE Proposed 2004-2005 Increase in State Aid for Basic Educational Operations***

Difference Between Enacted Budget and CFE Proposal

$ Difference .

% Difference

New York State Total

680

2,864,439

475,440,857

4.3%

2,131,776,093

-1,656,335,236

-77.7%

High NRC Districts*

207

1,571,809

383,973,410

5.2%

1,739,331,067

-1,355,357,657

-77.9%

Average NRC Districts

338

884,326

68,596,873

2.3%

389,543,476

-320,946,603

-82.4%

Low NRC Districts

135

408,304

22,870,574

3.5%

2,901,549

19,969,025

688.2%

Notes: *The four high-need categories are New York City; the Big 4 Cities (Buffalo, Rochester, Syracuse and Yonkers); the Other High NRC Urban and Suburban Districts; and the High NRC Rural Districts.

**From data on "increase over base without selected aid catecories" from Adopted Budget school aid runs available at http://www.assembly.state.ny.us/comm/WAM/20040809/

*** From CFE Operating Aid Proposal available at http://www.cfequity.org/SBETaskForceFinalReport.pdf

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Figure 8

2004-2005 Enacted Budget: Increases in State Aid for Basic Educational Operations, by "Combined Wealth Ratio" (CWR) Deciles Combined Wealth Ratio (CWR) Decile (from the poorest decile #1 to the wealthiest #10)

Percentage of Pupils Eligible for Free or Reduced Price Lunch

Number of Districts

Number of Pupils

2004-2005 Enacted Budget: Increase from Prior Year in State Aid for Basic Educational Operations*

$ increase.

% Increase

2,864,439

475,440,857

4.3%

68

234,172

75,961,035

0.4976

68

117,017

0.4976

0.5715

68

CWR Decile 4

0.5715

0.6591

CWR Decile 5

0.6591

CWR Decile 6

CFE Proposed 2004-2005 Increase in State Aid for Basic Educational Operations**

Difference Between Enacted Budget and CFE Proposal

$ Difference.

% Difference

2,131,776,093

1,656,335,236

-77.7%

5.1%

327,531,925

-251,570,890

-76.8%

22,758,536

3.4%

127,444,177

-104,685,641

-82.1%

119,395

13,659,485

2.3%

124,564,088

-110,904,603

-89.0%

68

119,717

10,482,686

1.9%

97,391,074

-86,908,388

-89.2%

0.7825

68

164,183

10,970,435

1.6%

116,617,337

-105,646,902

-90.6%

0.7825

0.9242

68

1,296,388

286,226,044

5.3%

1,260,270,041

-974,043,997

-77.3%

CWR Decile 7

0.9242

1.1952

68

210,037

22,767,844

3.6%

67,703,961

-44,936,117

-66.4%

CWR Decile 8

1.1952

1.5434

68

262,213

18,339,331

3.0%

9,691,761

8,647,570

89.2%

CWR Decile 9

1.5434

2.4537

68

208,541

10,965,885

3.3%

149,196

10,816,689

7250.0%

CWR Decile 10

2.4537

29.1525

68

132,776

3,309,576

2.6%

412,533

2,897,043

702.3%

From

To

New York State - Total

0.1952

29.1525

680

CWR Decile 1

0.1952

0.4306

CWR Decile 2

0.4306

CWR Decile 3

Notes:

*From data on "increase over base without selected aid catecories" from Adopted Budget school aid runs available at http://www.assembly.state.ny.us/comm/WAM/20040809/ ** From CFE Operating Aid Proposal available at http://www.cfequity.org/SBETaskForceFinalReport.pdf

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Figure 9

Constitutional Funding Gaps (in % Terms) of New York State's School Districts by "Combined Wealth Ratio" Deciles 125%

100%

75%

50%

25%

0% CWR Decile 1 CWR Decile 2 CWR Decile 3 CWR Decile 4 CWR Decile 5 CWR Decile 6 CWR Decile 7 CWR Decile 8 CWR Decile 9 CWR Decile 10

-25%

-50%

-75%

The 3 deciles of school districts with the most resources relative to their student enrollments and student needs had negative funding gaps, meaning that they received greater increases in state aid under the adopted budget than they would have received under Year 1 of the CFE proposal (2004-05). The 2 best off of these deciles had negative funding gaps that were so large that they are off this chart.

-100%

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Figure 10

Constitutional Funding Gaps (in % Terms) for New York City and the 55 of the 57 Other Counties with Constitutional Funding Gaps 100%

60%

Y a te s W y o m in g W e s tc h e s te r W ayne W a s h in g t o n W a rre n U ls t e r T o m p k in s T io g a S u lliv a n S u f f o lk S te u b e n S eneca S c h u y le r S c h o h a r ie S c h e n e c ta d y S a ra to g a S t.L a w re n c e R o c k la n d R e n s s e la e r O ts e g o O sw ego O r le a n s O ra n g e O n t a r io O nondaga O n e id a N ia g a r a N e w Y o r k C it y N assau M o n tg o m e ry M o n ro e M a d is o n L iv in g s t o n L e w is J e ffe rs o n H e r k im e r G re e n e G enesee F u lt o n F r a n k lin E ssex E r ie D u tc h e s s D e la w a r e C o r t la n d C o lu m b ia C lin t o n Chenango Chem ung C h a u ta u q u a C ayuga C a tta ra u g u s B ro o m e A lle g a n y A lb a n y

20%

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Figure 11, Page 1

2004-2005 Enacted Budget: Increases in State Aid for Basic Educational Operations, by Big 5 Cities and All Counties Number of Districts

Area

New York State Total New York City

Number of Pupils

$ Increase.

% Increase

CFE Proposed 2004-2005 Increase in State Aid for Basic Educational Operations**

2004-2005 Enacted Budget: Increase from Prior Year in State Aid for Basic Educational Operations*

Difference Between Enacted Budget and CFE Proposal

$ Difference

% Difference

1,656,335,236 -863,982,449

-76.9%

60,879,345

-45,639,198

-75.0%

70,935,459

-50,333,481

-71.0%

6.9%

31,287,043

-21,573,111

-69.0%

5,924,349

6.9%

18,672,196

-12,747,847

-68.3%

41,018

2,406,699

2.1%

19,667,222

-17,260,523

-87.8%

8,178

1,225,291

2.4%

7,925,532

-6,700,241

-84.5%

680

2,864,439

475,440,857

4.3%

2,131,776,093

1

1,039,124

259,395,944

5.8%

1,123,378,393

Buffalo

1

44,028

15,240,147

5.0%

Rochester

1

40,247

20,601,978

8.3%

Syracuse

1

21,918

9,713,932

Yonkers

1

25,042

Albany

13

Allegany

12

-77.7%

COUNTIES

Broome

12

33,025

3,483,696

2.6%

26,662,300

-23,178,604

-86.9%

Cattaraugus

12

16,068

1,718,814

1.8%

15,990,448

-14,271,634

-89.3%

Cayuga

7

11,849

1,339,316

2.4%

8,034,170

-6,694,854

-83.3%

Chautauqua

18

23,453

2,254,703

1.8%

21,581,204

-19,326,501

-89.6%

Chemung

3

12,585

591,730

0.9%

9,278,721

-8,686,991

-93.6%

Chenango

8

9,834

827,339

1.5%

9,651,230

-8,823,891

-91.4%

Clinton

8

13,424

1,025,387

1.5%

8,347,412

-7,322,025

-87.7%

Columbia

6

9,436

519,843

1.6%

5,053,704

-4,533,861

-89.7%

Cortland

5

7,922

413,849

1.0%

6,297,268

-5,883,419

-93.4%

Delaware

12

7,277

1,290,382

3.6%

5,696,579

-4,406,197

-77.3%

Dutchess

13

48,498

4,484,472

3.3%

23,955,211

-19,470,739

-81.3%

Erie

28

142,253

22,926,889

3.8%

106,014,711

-83,087,822

-78.4%

Essex

11

4,903

1,292,863

6.7%

2,845,658

-1,552,795

-54.6%

Franklin

7

8,900

1,481,587

2.9%

7,274,143

-5,792,556

-79.6%

Fulton

7

9,488

1,100,903

2.2%

7,943,416

-6,842,513

-86.1%

Genesee

8

10,622

489,267

0.9%

8,197,518

-7,708,251

-94.0%

Greene

6

7,877

869,237

3.5%

6,188,218

-5,318,981

-86.0%

Hamilton

4

549

33,019

2.7%

-0-

33,019

-0-

Herkimer

11

11,160

1,091,907

1.9%

9,171,083

-8,079,176

-88.1%

Jefferson

11

18,365

2,494,571

2.6%

19,700,724

-17,206,153

-87.3%

Lewis

5

4,706

1,401,996

5.3%

4,743,671

-3,341,675

-70.4%

Livingston

8

9,771

739,584

1.5%

7,213,376

-6,473,792

-89.7%

Madison

10

12,128

265,871

0.5%

9,531,588

-9,265,717

-97.2%

Monroe

18

126,441

26,602,682

5.5%

99,084,734

-72,482,052

-73.2%

Notes:

*From data on "increase over base without selected aid categories" from Adopted Budget school aid runs available at http://www.assembly.state.ny.us/comm/WAM/20040809/ ** From CFE Operating Aid Proposal available at http://www.cfequity.org/SBETaskForceFinalReport.pdf

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Figure 11, Page 2

2004-2005 Enacted Budget: Increases in State Aid for Basic Educational Operations, by Big 5 Cities and All Counties Number of Districts

Area

New York State - Total

Number of Pupils

2004-2005 Enacted Budget: Increase from Prior Year in State Aid for Basic Educational Operations* $ Increase

% Increase

CFE Proposed 2004-2005 Increase in State Aid for Basic Educational Operations**

Difference Between Enacted Budget and CFE Proposal

$ Difference

% Difference

680

2,864,439

475,440,857

4.3%

2,131,776,093

1,656,335,236

-77.7%

5 56 10 15 18 9 17 5 9 12 6 11 8 17 12 6 6 2 4 14 67 8 6 6 9 9 11 11 40 5 2

7,885 214,203 34,850 37,899 77,113 18,436 67,198 8,011 25,222 9,358 17,103 23,746 43,187 17,450 36,236 22,812 5,479 2,316 5,277 18,558 266,756 11,960 8,986 12,784 28,849 11,345 10,630 18,225 145,174 5,533 3,004

1,028,873 20,845,935 3,132,569 5,539,008 13,320,179 992,004 5,685,425 523,209 2,215,031 1,011,206 731,968 290,871 2,586,026 2,867,899 1,760,769 2,332,636 217,785 144,240 1,078,867 4,162,398 37,235,892 980,407 623,327 1,312,603 2,775,270 1,888,094 2,054,870 1,296,868 13,763,820 507,151 767,816

2.5% 4.8% 2.0% 3.1% 4.2% 1.4% 2.3% 1.3% 1.9% 2.2% 1.8% 0.3% 2.8% 2.8% 1.5% 3.1% 0.7% 1.1% 4.3% 4.2% 3.8% 1.9% 1.3% 3.0% 2.9% 4.8% 3.8% 1.5% 5.1% 1.7% 6.4%

7,582,702 34,760,411 27,741,155 35,597,387 55,472,788 10,249,621 56,014,084 8,158,364 27,619,081 7,289,053 -015,242,533 6,355,728 16,005,555 12,563,220 14,796,637 4,519,695 1,415,855 4,295,917 15,333,596 80,352,745 12,744,892 8,380,445 6,206,703 19,484,341 5,410,356 8,812,966 15,623,210 28,871,213 3,644,627 1,802,979

-6,553,829 -13,914,476 -24,608,586 -30,058,379 -42,152,609 -9,257,617 -50,328,659 -7,635,155 -25,404,050 -6,277,847 731,968 -14,951,662 -3,769,702 -13,137,656 -10,802,451 -12,464,001 -4,301,910 -1,271,615 -3,217,050 -11,171,198 -43,116,853 -11,764,485 -7,757,118 -4,894,100 -16,709,071 -3,522,262 -6,758,096 -14,326,342 -15,107,393 -3,137,476 -1,035,163

-86.4% -40.0% -88.7% -84.4% -76.0% -90.3% -89.9% -93.6% -92.0% -86.1% -0-98.1% -59.3% -82.1% -86.0% -84.2% -95.2% -89.8% -74.9% -72.9% -53.7% -92.3% -92.6% -78.9% -85.8% -65.1% -76.7% -91.7% -52.3% -86.1% -57.4%

COUNTIES, Continued Montgomery Nassau Niagara Oneida Onondaga Ontario Orange Orleans Oswego Otsego Putnam Rensselaer Rockland St. Lawrence Saratoga Schenectady Schoharie Schuyler Seneca Steuben Suffolk Sullivan Tioga Tompkins Ulster Warren Washington Wayne Westchester Wyoming Yates

Notes:

*From data on "increase over base without selected aid categories" from Adopted Budget school aid runs available at http://www.assembly.state.ny.us/comm/WAM/20040809/ ** From CFE Operating Aid Proposal available at http://www.cfequity.org/SBETaskForceFinalReport.pdf

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